Greenland Holding Group Co., a major Chinese state-owned real-estate developer, announced plans this week to invest £1.2 billion ($2 billion) in two real estate projects in London, marking its entry into the U.K. market. Greenland signed an agreement to buy developer Minerva's Ram Brewery, a historic seven acre site in Wandsworth claimed to be the UK's oldest working brewery until it closed in 2006, according to a City A.M. article. Minerva was acquired by clients of Ares Management and Delancey in 2011, who sold the property this month to Greenland for £600m. The brewery site has outline planning consent for 661 new homes, including a 36-story tower providing 166 units and 9,500 square metres of space for new shops and restaurants.
Paul Goswell, managing director of Delancey, said: "Since acquiring Minerva two years ago, we have worked hard to comprehensively redesign the original scheme which culminated in planning consent being secured last December. Our strategy had been to implement the scheme ourselves, possibly with a partner, but that changed when Greenland made their unsolicited proposal."
Greenland president and chairman Zhang Yuliang, who flew to London for the signing of the Ram Brewery deal, said: "London is the global financial centre as well as the most open and diversified city that enjoys the most mature economic development, making it the first option for our investment in Europe. Due to the active trading in London local real estate market in the last two years, the average residential price rose by 10% in 2013, and the increase in demand is expected to continue in 2014. There have been more and more individual investors who favor the UK market, thanks to the stable return on assets, high quality assets and sound market liquidity."
Guy Grainger, UK CEO of Jones Lang LaSalle, which aligned Minerva with Greenland, described the project as a landmark transaction for the London residential market. "This deal emphasizes the strong relationships currently being created between the UK and China, and further highlights London as the No 1 destination for international capital," he added.
Greenland will also build apartments on a 3,700-square-meter site in the city's financial district of Canary Wharf. Greenland said it plans to build London's tallest luxury residential housing project at the site. More details on that project will be announced at the end of the month, the company said.
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